Iowa celebrates record biodiesel sales thanks to proactive state legislation

Photo: Jenna Higgins Rose, Iowa Biodiesel Board

The Iowa Biodiesel Board is celebrating a milestone in the adoption of biodiesel blends, with sales in 2023 reaching 486.5 million gallons, nearly tripling from the 160.8 million gallons recorded in 2007.

The news comes from the state’s new Biofuel Tax Credits Program Evaluation Study, published by the Iowa Department of Revenue.

“This remarkable growth reflects Iowa’s forward-thinking legislation and sustained commitment to renewable energy, solidifying the state as a national leader in biodiesel production and consumption,” said Grant Kimberley, executive director of the Iowa Biodiesel Board and senior director of market development for the Iowa Soybean Association.

State incentives, including a producer credit, a fuel-tax differential and a retailer credit, including a credit for sales of 30 percent biodiesel and above (the nation’s first), played a critical role in this success.

These incentives offer financial support to retailers who sell biodiesel blends, effectively making biodiesel more accessible across Iowa and helping drive a significant increase in biodiesel’s share of Iowa’s diesel market.

In 2007, biodiesel blends accounted for 22.6 percent of total diesel sales in Iowa.

Today it represents 58.7 percent.

“Thanks to Iowa’s proactive biofuel policies, we’re seeing impressive growth in biodiesel usage, which provides cleaner fuel options and drives economic benefits for Iowa’s communities and the agricultural sector,” Kimberley said.

“This legislative support allows us to build on our renewable energy infrastructure, creating local jobs and strengthening our state’s commitment to sustainability,” he added.

Kimberley noted that by increasing soybean-oil value, biodiesel supports an estimated 13 percent of the price per bushel of soybeans.

In recent years, Iowa’s Renewable Fuel Infrastructure Program has made significant contributions to expanding biofuel infrastructure, funding over 1,300 biofuel projects across the state.

This investment underscores Iowa’s dedication to maintaining its leadership in the biofuel sector and driving growth in the agriculture industry, benefiting both consumers and local farmers.

“As Iowa continues to invest in biofuels and strengthen its legislative framework, the state stands as a testament to how renewable energy initiatives can successfully integrate into and bolster local economies,” said IBB Chair Nathan Nolte, who also serves as sales manager of renewable fuels for biodiesel producer AGP.

“With sustained support, Iowa is well-positioned to drive biodiesel adoption even further and continue serving as a model for states across the nation,” Nolte added.

Biodiesel is made from agricultural byproducts and coproducts such as soybean oil.